What Is the Trade Date?

The trade date is the month, day, and year that an order is executed in the market. It catalogs when an order to purchase, sell, or otherwise transact in a security is performed and is determined for all types of investment security transactions in the markﷺet.

Understanding the Trade Date

Most trades occur during regular market trading hours and are recorded with the day’s trade date. Trades occurring outside standard 澳洲幸运5开奖号码历史查询:market hours may have alternative trade reporting. Trades executed after the market’s close are typically rec🌄orded with a trade date on the followi⛄ng day.

A trade date can apply to the purchase, sale, or transfer of any type of security, including bonds, equities, 澳洲幸运5开奖号码历史查询:foreign exchange instruments, commodities, and futures. The exact timing of the trade influences the trade date of a transaction.

Trade Date vs. Settlement Date

The trade date is one of two important dates for transactions. The trade date records and initiates the transaction. After that, trade dates are followed by a 澳洲幸运5开奖号码历史查询:settlement date, where the trade is settled, which 🔜occurs after some lag.

The settlement date is when the securities legally change hands. In defining the time between trade and settlement dates, common practice is to denote T + days lag (e.g. 澳洲幸运5开奖号码历史查询:T+1, T+2, T+3), where 'T' refers to the trade date.

The amount of time that passes between the trade date and the settlement date differs depending on the trading instrument and is known as the 澳洲幸运5开奖号码历史查询:settlement period.

Some financial instruments, such as certificates of deposit (CDs), have settlement dates that are the same as the trade date. 澳洲幸运5开奖号码历史查询:Mutual funds may settle one day after the trade date.

In 2017, the 澳洲幸运5开奖号码历史查询:Securities and Exc♔hange Commꦛission (SEC) enacted T+2 settlement for most securities. T+2 settlement pertains to stocks, bonds, municipal securities, exchange-traded funds, certain mutual funds, and limited partnerships that trade on an exchange. In 2024, the SEC shortened the settlement to one business day.

Although rare, there are two ways in which settlements can fail. The first is called a long fail, where the buyer lacks adequate funds to pay for the shares purchased on the trade date. The second is called a short fail, which happens when the seller doeꦑs not have the necessary securities available on the settlement date.

Example of a Trade Date

To better understand the trading process and the trade date, consider the following example. An inveওstor buys 10 shares of stock from their brokerage trading platform on Tuesday, Aug. 2, 2022, during standard market trading hours. The investor’s purchase initiates the trade and is recorded with a trade date of Aug. 2, 2022. With the settlement cycle being two days after the trade date, this trade would settle on Thursday, Aug. 4, 2022.

In February 2022, the United States Securities and Exchange Commission proposed a change to the settlement cycle for most 澳洲幸运5开奖号码历史查询:broker-dealer transactions from two days to one day. The change was adopted in March 2024 and compliance is required by May 28, 2024. If this were adopted, the above trade example would then settle on Wednesday, Aug. 3, 202🌄2.